Wage inflation and the post-1991 duration puzzle

We find that the unusually low wage inflation in the U.S. after 1991 can be traced to unusually high rates of mean unemployment duration, given the level of the unemployment rate. Further, the divergence of the duration and unemployment rate time series after 1991 can be partially explained by a rise in the fraction of the unemployed who were older job losers. This change in the composition of the unemployed is what we might expect from widespread corporate wnsizing